Accounting · Accounting Principles - Consistency
Which of the following is NOT a valid provision regarding the Consistency Convention as applied in the preparation of financial statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1When a change in an accounting policy is implemented, the enterprise is required to disclose the nature of the change along with its financial impact.
- 2A change in an existing accounting method is permissible only when necessitated by an Accounting Standard or for a fairer presentation of accounts.
- 3Once an accounting method is adopted, it must be applied consistently from one period to the next to enable meaningful comparison.
- 4An enterprise is permitted to change its established accounting methods at any time to ensure that reported net profits match internal management targets without separate disclosure.✓
Correct answer
An enterprise is permitted to change its established accounting methods at any time to ensure that reported net profits match internal management targets without separate disclosure.
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